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VIENNA— Iran and Iraq on Tuesday put OPEC on notice of substantial oil output increases to come, saying others in the producer cartel will need to give way to make room for them.

Speaking ahead of an OPEC meeting, oil ministers for the two countries - rivals as the group's second and third biggest producers after Saudi Arabia - said they were targeting 4 million barrels per day [bpd], growth of about one million bpd apiece.

Neither country can expect to reach those goals any time soon, but both are keen to prepare the ground for special treatment should the Organization of the Petroleum Exporting Countries need next year to negotiate a deal to curb supplies to keep oil prices above its favored $100 a barrel.

Neither can raise output quickly enough to make waves at Wednesday's OPEC meeting - ministers confidently predict no change in the group's production cap of 30 million bpd.

“This looks like jockeying for position ahead of a potential need for a need for a structured output agreement in 2014,” said Bill Farren-Price of consultancy Petroleum Policy Intelligence.

A senior Gulf delegate said next June's meeting might require OPEC to consider supply cuts. More oil from Iran and Iraq, a recovery in output from fellow OPEC member Libya and fast-rising U.S. shale oil could tip the balance.

“Maybe we'll talk about cuts in six months from now,” he said.

Iranian Oil Minister Bijan Zanganeh said Iran will take six months after sanctions are lifted to return to full oil output capacity of 4 million bpd.

Zanganeh was reappointed by Iran's new reformist President Hassan Rouhani and will be responsible for rebuilding Iran's oil industry should Washington and Brussels lift sanctions in six months as part of a deal on Iran's nuclear program.

“In Zanganeh's favor, he's the one oil minister in Iran's post-revolutionary period to have a positive impact on increasing production capacity and took it above 4 million for a period of time. He has form,” said Farren-Price.

Iranian oilfields had not suffered technically as a result of the sanctions which have seen Iranian oil output fall by a million barrels per day to less than three million bpd, Zanganeh said.

Asked whether he expected others in OPEC to make room for Iran's return, Zanganeh said: “This is the tradition. When a member country after some difficulties returns to the market, other members accept to make room for them.”

“The member countries who produced more during the past years. I think they will understand they should make room for Iran,” he said.

Both Saudi Arabia and Iraq have raised output in the past two years since sanctions were imposed on Tehran, but Baghdad will argue that it should be a special case given many years lost to sanctions and war under former President Saddam Hussein.

Cautious Iran budget

Zanganeh said he hoped Iran would lift exports in 2014 from current levels of around 1.2 million bpd.

With domestic consumption running at about 700,000 bpd that would take total Iraqi supply above 4 million bpd, up from just below three million bpd now.

That scale of such a production increase would raise the pressure on others in OPEC, chiefly Saudi Arabia, to curb supply to prevent oil prices falling.

But industry experts and oil company executives working on Iraqi oilfield development say a four million bpd output target looks very optimistic for next year because of infrastructure constraints and security issues.

“Those Iraqi estimates are over optimistic. I don't think their production can hit that,” said Cuneyt Kazokoglu of energy consultancy FGE. “Neither can KRG exports hit 400,000 bpd. If they really push it perhaps they could do 300,000 bpd.”

“Iraq has serially failed to meet its expansion targets in recent years and this latest pronouncement stretches credibility,” said Farren-Price.

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